Jostens, Inc.

5501 Norman Center Drive
Minneapolis, Minnesota 55437-1088
U.S.A.
(612) 830-3300
Fax: (612) 897-4116
Web site: http://www.jostens.com

Public Company
Incorporated: 1906 as Jostens Manufacturing Company
Employees: 6,500
Sales: $742.5 million (1997)
Stock Exchanges: New York
Ticker Symbol: JOS
SICs: 2732 Book Printing; 2752 Commercial Printing, Lithographic; 3900 Miscellaneous Manufacture; 3911 Jewelry, Precious Metal; 7389 Business Services, Not Elsewhere Classified

Jostens, Inc. is best known as a manufacturer of high-quality class rings for high school and college students. Since 1960 the company also has produced specially commissioned rings for contestants in the World Series, the Super Bowl, the NBA Championship, and the NHL Stanley Cup. Despite such high-profile coups, however, it is the Jostens $638.8 million school products segment that provides the lion’s share of revenues. The company holds more than 40 percent of the combined $1 billion annual U.S. market in graduation products, yearbooks, and class rings and jewelry. After a disappointing end to a promising educational software venture—one that contributed to the interruption of a three-decade-long streak of earnings and revenue increases—Jostens hoped their name-brand appeal would translate to increased sales of products designed to celebrate life events beyond the school walls.

From Small-Town Business to Multimillion-Dollar Corporation: Late 1800s–1960s

Begun in 1897 by Otto Josten, Jostens was originally a small jewelry and watch repair business located in Owatonna, Minne-sota. In 1900 the founder began manufacturing emblems and awards for nearby schools and in 1906, the year of incorporation, Josten added class rings to his product line, to be sold to schools throughout the Midwest. The company remained small and relatively inconspicuous until Daniel C. Gainey, a former teacher and football coach, was hired in 1922 as the first full-time Jostens ring salesman. The rings at the time carried no gemstones and were all one size. Yet Gainey, with his dynamic and winning personality, secured sales of $18,000 within his first year. The amount was so large that he was forced to return to Owatonna to ensure personally that production demands could be met. By 1923 Gainey had enlisted four more sales representatives—all part-time—and revenues quickly rose to $70,000. Thus class rings became the central concern for the Jostens Manufacturing Company. In 1930 the watchmaking and repair business was sold and the capital was used to construct the company’s first ring manufacturing plant. Three years later, with sales approaching the $500,000 mark, Gainey was elected chairman and CEO, positions he held until his retirement in 1968. According to several accounts, Gainey’s greatest contribution to the company was his establishment and motivation of a nationwide sales force. Direct sales through independent representatives remain the primary source for the company’s virtually uninterrupted growth.

During World War II Jostens contributed to the war effort by adapting its plant and equipment to manufacture precision parts and other materials. Major expansion came following the end of the war. In 1946 the company added graduation announcements to its offerings; in 1950 Jostens launched the American Yearbook Company. Both moves further tapped the education market and made the company less dependent on seasonal sales from rings. In 1958 the company made its first acquisition, purchasing the Ohio-based Educational Supply Company, a manufacturer of school diplomas. Jostens went public the following year and a seemingly unending series of acquisitions, which fortified the company’s dominance of the high school and college products markets, characterized the next ten years. Sales for 1962 totaled $26 million; three years later the company obtained its listing on the New York Stock Exchange. In 1968 the company expanded into the Can adian photography market with the purchase of Winnipeg-based National School Studios. By this time Jostens was the undisputed domestic leader in both class ring and yearbook sales. Gainey’s retirement, however, coupled with Jostens’s relocation to Minneapolis in 1969, triggered a tumultuous period that nearly shipwrecked the then nearly $100-million-dollar company.

Rocky Start to Leadership Change: 1970s

Star Tribune columnist Dick Youngblood, reflecting back on this period, wrote: “Jostens had been in turmoil since the late 1960s, when company patriarch Daniel C. Gainey, a major stockholder, pretended to retire as CEO. The trouble was, Gainey remained active enough over the ensuing four years to force the resignation of three chairmen and a president, including his own son.” In 1970, amidst the turmoil, a top-performing Jostens salesman and division manager was appointed executive vice-president and effectively became the company’s chief operating officer. His name was H. William (Bill) Lurton. Unbeknownst to senior management, however, including Lurton, Gainey had begun negotiations with acquisition-hungry Bristol-Myers. Once Gainey’s plan surfaced, several top Jostens officials tendered their resignations; Lurton was among the few who remained. Although Bristol-Myers halted negotiations after the management fallout, Jostens remained in peril under the leadership of replacement CEO Richard Schall. A former top official at General Mills and Metro-Goldwyn-Mayer, Schall, according to Corporate Report editor Terry Fiedler, “presided over Jostens for about 18 months before the advent of what amounted to a palace coup.” An outsider with little knowledge of the business, Schall had brought in his own management team and radically disrupted the friendly, teamwork-oriented corporate culture and threatened to move the company too quickly into new, uncharted territory. “The Lurton-led old guard demanded that Schall leave, threatening to leave themselves if he didn’t. The directors sided with the old guard and in February 1972 Lurton became CEO of Jostens.”

Twenty-one years later, Lurton remained in the position, well-liked by his employees and greatly esteemed by his fellow Minnesota CEOs. During his early tenure he moved quickly to reestablish Jostens as a thriving, focused company. Diversification beyond educational products, thought to be the key to the company’s future, was renewed only for a short time before being curtailed in large part. In 1974 Lurton divested Jostens of a greeting cards manufacturer and a men’s accessories business. Five years later he also rid the company of interests in wedding rings and library supplies. Jostens Travel, first organized in 1972, also was dissolved before the end of the decade. Jostens did keep at least one peripheral acquisition, Artex Enterprises, for the long term. A manufacturer of custom-imprinted athletic and casual wear, the Artex label survives within the Jostens Sportswear division and is marketed primarily through mass merchants.

Changing Demographics Challenge Lurton: 1980s

Aside from the aftermath of the Gainey debacle, Lurton’s greatest challenge as a CEO came in the late 1970s and early 1980s, when demographic studies clearly showed that the last of the baby boom generation had graduated from high school and, therefore, beyond the core products line. According to Jackey Gold in Financial World, “Lurton’s worry was that declining high school enrollments would shake Wall Street’s faith in the company’s ability to perform. Jostens’ board of directors, too, became infected by such concerns and in August 1982 approved Lurton’s proposal for a management buyout.” The decision to go private was, for lack of financing, never realized; neither, however, was the company’s forecasted decline.

Instead, Lurton launched a concerted campaign to impress Wall Street and counteract potential downswings in profits by boldly entering the proprietary schools business. Beginning in 1983, he acquired San Gabriel Colleges of California and Metridata Education Systems of Kentucky. Three additional private vocational schools were acquired in 1984. That same year Jostens also entered the audiovisual learning and educational software fields by acquiring the Educational Systems Division of Borg-Warner Corporation, which it later renamed Jostens Learning Systems. The new flurry of purchases carried sales to more than $400 million in 1985, when Jostens was accorded Fortune 500 status for the first time. In 1986 the company acquired Illinois-based Prescription Learning Corporation (PLC). A developer of customized computer hardware, software, and support services for the educational market, PLC was merged with Education Systems Corporation three years later to form Jostens Learning Corporation (JLC), a wholly owned subsidiary.

Meanwhile, to the consternation of several analysts, Jostens divested itself of its burgeoning list of proprietary schools, all 36 of them. The company sold the schools to CareerCom Corp. in 1987 for a sizable profit. As then Education Division spokesperson Gary Buckmiller explained, “We didn’t view the sale as getting out of the proprietary school business, but rather as changing the way we’re involved in the business.” The involvement, through JLC, has become one of support and service for, rather than management of, instructors and curriculum. Jostens’s one remaining non-educational venture, the Business Products Division, also was sold in 1987, for a gain of $40 million. Now 90 years old, the company had returned to its roots in its service emphasis. By this time Jostens boasted an employee work force of some 9,000, in addition to an independent sales force numbering approximately 1,400.

Company Perspectives:

Jostens provides products and services that help people celebrate achievement, reward performance, recognize service and commemorate experiences.

We provide these achievement and affiliation products in partnership with the diverse organizations people belong to throughout their lives. As a partner, we are committed to delivering value and quality that exceed the needs of the people and organizations we serve. Jostens is a team of employees and independent business partners. Our aim is to be the world leader in providing achievement and affiliation products and to constantly deliver exceptional performance.

Brightly Shined Hopes Tarnish: 1990s

Jostens’s nearly 27 percent average return on investment between the years 1983 and 1989 brought kudos from all corners for the CEO. Fortune magazine highlighted Jostens among its 500 in 1989 as one of the “Companies That Compete Best.” In 1990 Lurton was accorded the honor of “Executive of the Year” by Corporate Report Minnesota; further recognition came the same year from Industry Week, which celebrated Lurton as one of “America’s Unsung Heroes.” Until fiscal 1992 the news regarding Jostens and Lurton continued to be highly favorable. The 1990 purchase of Gordon B. Miller & Co. (the oldest recognition products company in North America) and Lenox Awards augured well for the company, as did its multimedia agreement with Western Publishing’s Little Golden Books. Even the 1992 performance reports were respectable, considering the lingering effects of a recession: net sales increased two percent, while net income showed a four percent decline. The announced consolidation of jewelry manufacturing and photo processing operations were expected to contribute to a quick rebound. The Jostens organizations hoped that rising school enrollment, an improving economy, and a new management team for the Sportswear group would improve the company’s performance.

Also fueling hopes for the future was JLC, the leader of the computer-based instructional technology field. Fiscal 1992 revenues for JLC totaled $172 million, or approximately 20 percent of all corporate gross income. JLC, operating in a marketplace that experts estimated as only 15 percent tapped, appeared poised for fast-paced growth, especially considering its August 1992 purchase of chief competitor Wicat Systems and its arrangement with Texas-based Dell Computer to market a Jostens line of 386 and 486 systems. Lurton expected to see an increase of about 25 percent annually. His goal was to return Jostens to “double-digit growth in sales and earnings.”

Jostens posted a net loss of $12.1 million in fiscal year 1993. According to an April 1994 Youngblood article, about half of the loss was due to a “poorly managed” consolidation of the photography operation. Compounding problems, JLC missed some key changes in the market, including tightening school budgets and an accompanying shift in demand toward less expensive products and systems.

Lurton announced his retirement as chairman of the board and CEO in October 1993. Robert P. Jensen, a director since 1980, succeeded him as chairman. The combination of missed earnings projections, losses in the earnings column, and nosediving stock prices had raised the ire of stockholders and Lurton’s long, successful tenure ended on a sour note. Yet, under his leadership, the company had put together an enviable succession of sales and earnings increases even while the student population was shrinking.

Robert C. Buhrmaster, a Corning Inc. senior vice-president who came on board as chief of staff in December 1992 and moved into the president’s post in mid-1993, succeeded Lurton as CEO and led a revamping of the company. In rapid order, the sportswear division was sold. Veteran executives were replaced. The photography division and JLC were downsized. The corporate culture itself changed as management layers were cut and divisions reported more closely to headquarters. The design and marketing of traditional products such as rings were also re-examined. But losses continued into a second year; underperformance by JLC contributed to the $16.2 million deficit.

Jostens sold JLC to a group led by Boston-based investment firm Bain Capital, Inc. in June 1995 for $90 million in cash and notes. Wicat Systems, the computer-based aviation training division, was sold separately. The sales marked the end of a two-year restructuring and turned emphasis back on traditional business areas of making and marketing class rings, yearbooks, and other recognition products.

Profits for fiscal year 1995 improved in all areas but JLC and net income returned to the plus column with $50.4 million in earnings on $665.1 million in sales. The restructuring and other operational changes resulted in $11 million in cost savings, according to the Jostens annual report. Flush with cash from the JLC sale and the company restructuring, Jostens repurchased seven million shares of stock for $169.3 million in September 1995 through a Modified Dutch Auction tender offer. But the company failed to meet earnings expectations in the later half of fiscal 1996, and Wall Street reacted negatively.

Beginning a Second Century of Business

Buhrmaster continued to fine-tune Jostens in 1997. The company’s 100th year in business was celebrated in part with a new logo and identity system. For the first time Jostens consciously worked to extend brand awareness and preference. The effort was part of the larger mission to transform the company from a “ring and yearbook” business to “one that people call upon to help celebrate their most important moments.”

The company cut additional costs with the transfer of some ring production to Mexico. In addition, the purchase of the Gold Lance class ring brand from Town & Country Corporation in July 1997 gave Jostens a strong presence in the retail class ring business, which was dominated by companies such as J.C. Penney and Wal-Mart.

Although the retail market accounted for about 33 percent of all U.S. annual class ring sales, Jostens’s name-brand appeal helped the company maintain a dominant market share. Scott Carlson wrote in a May 1998 St. Paul Pioneer Press article, “Industry observers and Jostens’ competitors attribute the company’s market strength to making quality products, providing reliable service to students and parents, and hiring enterprising independent sales representatives who build long-term relationships with schools and gain access for in-school marketing.” But Jostens’s trade practices had drawn fire as well as praise.

Dallas-based Taylor Publishing, one of only two national yearbook companies competing against Jostens (the other was Herff Jones) claimed that the Minnesota company had tried to monopolize the Texas yearbook market. In May 1998 Taylor won a multimillion settlement, which Jostens planned to appeal. Jostens had been under the scrutiny of the attorney general’s office of Minnesota in the mid-1990s in regard to “exclusive supply contracts” with schools. And although the company denied that its sales practices were monopolistic, Jostens agreed to avoid using any techniques that would imply that the schools were locked in long-term exclusive deals. Jostens had revamping their sales operations as a part of the general company restructuring.

Buhrmaster, who added the company’s chairmanship to his roles as president and CEO in the beginning of 1998, had returned the company to profitability. Yet growth continued to be a concern: total sales for 1997 were up only 4.8 percent. Jostens’s mature school market had limited growth opportunities, but the company planned to make the most of those through products such as the “Millennium” ring collection, which capitalized on the interest in the turn of the century. The smaller recognition segment of the business, which primarily served U.S. and Canadian corporations and businesses, directed its focus on the fans of professional sports teams for added sales. Additional plant consolidation and infrastructure improvements that continued into 1998 delayed the implementation of any major expansion plans. The success of Buhrmaster’s tenure as the head of the century-old business would be measured by his ability to build markets for Jostens brand-name products while embarking on new business ventures.

Principal Subsidiaries

American Yearbook Company, Inc.; Jostens Canada, Ltd.; Jostens Direct, Inc.; Jostens Photography, Inc.; The Jostens Foundation, Inc.

Further Reading

Benson, Tracy E., “America’s Unsung Heroes,” Industry Week, December 3, 1990, p. 12.

Byrne, Harlan S., “Jostens Inc.: Demographics Offer an Earnings Kick,” Barron’s, October 14, 1991, p. 38.

Carlson, Scott, “Running Rings Around Competition,” St. Paul Pioneer Press, May 17, 1998, pp. ID, 3D.

Feyder, Susan, “Jostens’ New CEO Rings Out Some Old Concepts,” Star Tribune (Minneapolis), May 23, 1994, p. ID.

——, “Jostens Taking Charge for Closing Photo Plant,” Star Tribune (Minneapolis), May 1, 1998, p. 3D.

——, “Jostens To Buy Back 7 Million Shares for $168 Million in ‘Dutch Auction,’ “Star Tribune (Minneapolis), September 2, 1995, p. ID.

——, “Longtime Jostens CEO Lurton Says He’s Retiring,” Star Tribune (Minneapolis), October 29, 1993, p. ID.

——, “Rival Wins Suit Against Jostens over the Selling of Yearbooks,” Star Tribune (Minneapolis), May 15, 1998, p. 3D.

——, “Still Going for the Brass Ring,” Star Tribune (Minneapolis), April 20, 1998, p. ID.

Fiedler, Terry, “H. William Lurton: Modesty That Rings True,” Corporate Report Minnesota, January 1990, pp. 45–51, 92.

Fierman, Jaclyn, and Rayport, Jeffrey, “How To Make Money in Mature Markets,” Fortune, November 25, 1985, pp. 46–50.

Foster, Jim, “Jostens Plans Consolidation Moves,” Star Tribune (Minneapolis), January 29, 1992, p. 3D.

Fredrickson, Tom, “Jostens Tries Staff Buyouts To Ring in Costs,” Minneapolis/St. Paul CityBusiness, April 22-28, 1994, pp. 1, 30.

Gold, Jackey, “How To Make a Cash Cow Dance,” Financial World, June 12, 1990, p. 38.

Greenbaum, Jessica, “Lord of the Rings,” Forbes, May 21, 1984, pp. 108-10.

Gross, Steve, “Jostens Learning Expanding PC Line,” Star Tribune (Minneapolis), April 15, 1992, p. 3D.

“Highlights from Jostens’ History,” Minneapolis: Jostens, 1992.

“Jostens Has Lower Earnings, Sales,” Star Tribune (Minneapolis), January 19, 1993.

Jostens, Inc., Corporate Report Fact Book 1998, Minneapolis: Jostens, pp. 337–38.

“Jostens Moves to Head of the Class, St. Paul Pioneer Press & Dispatch, October 14, 1985.

Jostens’ Today (special 90th anniversary issue: “90 Years of People, Progress and Pride”), Minneapolis: Jostens, August 1987.

Marcotty, Josephine, “Boston Investment Group Is Buying Jostens Learning,” Star Tribune (Minneapolis), May 24, 1995, p. ID.

Moylan, Martin J., “Jostens Learning Gives Stock an Edge,” St. Paul Pioneer Press & Dispatch, August 12, 1991.

Peterson, Susan E., “Lower-Than-Expected Earnings Forecast Drops Jostens Stock,” Star Tribune (Minneapolis), June 15, 1996, p. ID.

Raley, Marcia A., “Dain Bosworth Research Capsule: Jostens,” January 25, 1988.

Saporito, Bill, “Companies That Compete Best,” Fortune, May 22, 1989, p. 36.

Spiegel, Peter, “Ringing True,” Forbes, November 6, 1995, p. 12.

Youngblood, Dick, “Former CEO of Jostens Explains What Went Wrong After 19 Years of Growth,” Star Tribune (Minneapolis), April 20, 1994, p. 2D.

——, “In a Shrinking Market, He Gently Led Jostens to New World of Growth,” Star Tribune (Minneapolis), March 18, 1991.

—Jay P. Pederson
—updated by Kathleen Peippo

Jostens, Inc.

5501 American Blvd. West
Minneapolis, Minnesota 55437
U.S.A.
Telephone: (952) 830-3300
Fax: (952) 830-3293
Web site: http://www.jostens.com

Private Subsidiary
Incorporated: 1906 as Jostens Manufacturing Company
Employees: 6,300
Sales: $807.2 million (2004)
NAIC: 339911 Jewelry (Including Precious Metal) Manufacturing; 511130 Book Publishers

Jostens, Inc. is best known as a manufacturer of high-quality class rings for high school and college students. For more than four decades, the company also has produced specially commissioned rings for contestants in the World Series, the Super Bowl, the NBA Championship, and the NHL Stanley Cup. Despite such high-profile coups and new ventures, the school products segment provided Jostens the lion's share of revenues. A promising educational software venture, for example, ended with disappointment and contributed to the interruption of a three-decade-long streak of earnings and revenue increases. Taken private in 2000, the century old company found itself being traded three times in the span of four years.

From Small-Town Business to Multimillion-Dollar Corporation: Late 1800s–1960s

Begun in 1897 by Otto Josten, Jostens was originally a small jewelry and watch repair business located in Owatonna, Minnesota. In 1900 the founder began manufacturing emblems and awards for nearby schools and in 1906, the year of incorporation, Josten added class rings to his product line, to be sold to schools throughout the Midwest. The company remained small and relatively inconspicuous until Daniel C. Gainey, a former teacher and football coach, was hired in 1922 as the first full-time Jostens ring salesman. The rings at the time carried no gemstones and were all one size. Yet Gainey, with his dynamic and winning personality, secured sales of $18,000 within his first year. The amount was so large that he was forced to return to Owatonna to ensure personally that production demands could be met. By 1923 Gainey had enlisted four more sales representatives—all part-time—and revenues quickly rose to $70,000. Thus class rings became the central concern for the Jostens Manufacturing Company. In 1930 the watchmaking and repair business was sold and the capital was used to construct the company's first ring manufacturing plant. Three years later, with sales approaching the $500,000 mark, Gainey was elected chairman and CEO, positions he held until his retirement in 1968. According to several accounts, Gainey's greatest contribution to the company was his establishment and motivation of a nationwide sales force. Direct sales through independent representatives were the primary source for the company's virtually uninterrupted growth.

During World War II Jostens contributed to the war effort by adapting its plant and equipment to manufacture precision parts and other materials. Major expansion came following the end of the war. In 1946 the company added graduation announcements to its offerings; in 1950 Jostens launched the American Yearbook Company. Both moves further tapped the education market and made the company less dependent on seasonal sales from rings. In 1958 the company made its first acquisition, purchasing the Ohio-based Educational Supply Company, a manufacturer of school diplomas. Jostens went public the following year and a seemingly unending series of acquisitions, which fortified the company's dominance of the high school and college products markets, characterized the next ten years. Sales for 1962 totaled $26 million; three years later the company obtained its listing on the New York Stock Exchange. In 1968 the company expanded into the Canadian photography market with the purchase of Winnipeg-based National School Studios. By this time Jostens was the undisputed domestic leader in both class ring and yearbook sales. Gainey's retirement, however, coupled with Jostens' relocation to Minneapolis in 1969, triggered a tumultuous period that nearly shipwrecked the then nearly $100 million company.

Rocky Start to Leadership Change: 1970s

Star Tribune columnist Dick Youngblood, reflecting back on this period, wrote: "Jostens had been in turmoil since the late 1960s, when company patriarch Daniel C. Gainey, a major stockholder, pretended to retire as CEO. The trouble was, Gainey remained active enough over the ensuing four years to force the resignation of three chairmen and a president, including his own son." In 1970, amidst the turmoil, a top-performing Jostens salesman and division manager was appointed executive vice-president and effectively became the company's chief operating officer. His name was H. William (Bill) Lurton. Unbeknownst to senior management, however, including Lurton, Gainey had begun negotiations with acquisition-hungry Bristol-Myers. Once Gainey's plan surfaced, several top Jostens officials tendered their resignations; Lurton was among the few who remained. Although Bristol-Myers halted negotiations after the management fallout, Jostens remained in peril under the leadership of replacement CEO Richard Schall. A former top official at General Mills and Metro-Goldwyn-Mayer, Schall, according to Corporate Report editor Terry Fiedler, "presided over Jostens for about 18 months before the advent of what amounted to a palace coup." An outsider with little knowledge of the business, Schall had brought in his own management team and radically disrupted the friendly, teamwork-oriented corporate culture and threatened to move the company too quickly into new, uncharted territory. "The Lurton-led old guard demanded that Schall leave, threatening to leave themselves if he didn't. The directors sided with the old guard and in February 1972 Lurton became CEO of Jostens."

Twenty-one years later, Lurton remained in the position, well-liked by his employees and greatly esteemed by his fellow Minnesota CEOs. During his early tenure he moved quickly to reestablish Jostens as a thriving, focused company. Diversification beyond educational products, thought to be the key to the company's future, was renewed only for a short time before being curtailed in large part. In 1974 Lurton divested Jostens of a greeting cards manufacturer and a men's accessories business. Five years later he also rid the company of interests in wedding rings and library supplies. Jostens Travel, first organized in 1972, also was dissolved before the end of the decade. Jostens did keep at least one peripheral acquisition, Artex Enterprises, for the long term. A manufacturer of custom-imprinted athletic and casual wear, the Artex label survived within the Jostens Sportswear division and was marketed primarily through mass merchants.

Changing Demographics: 1980s

Aside from the aftermath of the Gainey debacle, Lurton's greatest challenge as a CEO came in the late 1970s and early 1980s, when demographic studies clearly showed that the last of the baby boom generation had graduated from high school and, therefore, beyond the core products line. According to Jackey Gold in Financial World, "Lurton's worry was that declining high school enrollments would shake Wall Street's faith in the company's ability to perform. Jostens' board of directors, too, became infected by such concerns and in August 1982 approved Lurton's proposal for a management buyout." The decision to go private was, for lack of financing, never realized; neither, however, was the company's forecasted decline.

Instead, Lurton launched a concerted campaign to impress Wall Street and counteract potential downswings in profits by boldly entering the proprietary schools business. Beginning in 1983, he acquired San Gabriel Colleges of California and Metridata Education Systems of Kentucky. Three additional private vocational schools were acquired in 1984. That same year Jostens also entered the audiovisual learning and educational software fields by acquiring the Educational Systems Division of Borg-Warner Corporation, which it later renamed Jostens Learning Systems. The new flurry of purchases carried sales to more than $400 million in 1985, when Jostens was accorded Fortune 500 status for the first time. In 1986 the company acquired Illinois-based Prescription Learning Corporation (PLC). A developer of customized computer hardware, software, and support services for the educational market, PLC was merged with Education Systems Corporation three years later to form Jostens Learning Corporation (JLC), a wholly owned subsidiary.

Meanwhile, to the consternation of several analysts, Jostens divested itself of its burgeoning list of proprietary schools, all 36 of them. The company sold the schools to CareerCom Corp. in 1987 for a sizable profit. As then Education Division spokesperson Gary Buckmiller explained, "We didn't view the sale as getting out of the proprietary school business, but rather as changing the way we're involved in the business." The involvement, through JLC, has become one of support and service for, rather than management of, instructors and curriculum. Jostens' one remaining non-educational venture, the Business Products Division, also was sold in 1987, for a gain of $40 million. Now 90 years old, the company had returned to its roots in its service emphasis. By this time Jostens boasted an employee workforce of some 9,000, in addition to an independent sales force numbering approximately 1,400.

Company Perspectives:

Through tradition and technology, innovation and partnerships, Jostens continues to create powerful new ways for people to express their pride and mark life's biggest moments.

Jostens is a team of employees and independent business partners. Our aim is to be the world leader in providing achievement and affiliation products and to constantly deliver exceptional performance.

Tarnished Hopes: Early 1990s

Jostens' nearly 27 percent average return on investment between the years 1983 and 1989 brought kudos from all corners for the CEO. Fortune magazine highlighted Jostens among its 500 in 1989 as one of the "Companies That Compete Best." In 1990 Lurton was accorded the honor of "Executive of the Year" by Corporate Report Minnesota ; further recognition came the same year from Industry Week, which celebrated Lurton as one of "America's Unsung Heroes." Until fiscal 1992 the news regarding Jostens and Lurton continued to be highly favorable. The 1990 purchase of Gordon B. Miller & Co. (the oldest recognition products company in North America) and Lenox Awards augured well for the company, as did its multimedia agreement with Western Publishing's Little Golden Books. Even the 1992 performance reports were respectable, considering the lingering effects of a recession: net sales increased 2 percent, while net income showed a 4 percent decline. The announced consolidation of jewelry manufacturing and photo processing operations were expected to contribute to a quick rebound. Jostens hoped that rising school enrollment, a strengthening economy, and a new management team for the Sportswear group would improve the company's performance.

Also fueling hopes for the future was JLC, the leader of the computer-based instructional technology field. Fiscal 1992 revenues for JLC totaled $172 million, or approximately 20 percent of all corporate gross income. JLC, operating in a marketplace that experts estimated as only 15 percent tapped, appeared poised for fast-paced growth, especially considering its August 1992 purchase of chief competitor Wicat Systems and its arrangement with Texas-based Dell Computer to market a Jostens line of 386 and 486 systems. Lurton expected to see an increase of about 25 percent annually. His goal was to return Jostens to "double-digit growth in sales and earnings."

Jostens posted a net loss of $12.1 million in fiscal year 1993. According to an April 1994 Youngblood article, about half of the loss was due to a "poorly managed" consolidation of the photography operation. Compounding problems, JLC missed some key changes in the market, including tightening school budgets and an accompanying shift in demand toward less expensive products and systems.

Lurton announced his retirement as chairman of the board and CEO in October 1993. Robert P. Jensen, a director since 1980, succeeded him as chairman. The combination of missed earnings projections, losses in the earnings column, and nose-diving stock prices had raised the ire of stockholders and Lurton's long, successful tenure ended on a sour note. Yet, under his leadership, the company had put together an enviable succession of sales and earnings increases even while the student population was shrinking.

Robert C. Buhrmaster, a Corning Inc. senior vice-president who came on board as chief of staff in December 1992 and moved into the president's post in mid-1993, succeeded Lurton as CEO and led a revamping of the company. In rapid order, the sportswear division was sold. Veteran executives were replaced. The photography division and JLC were downsized. The corporate culture itself changed as management layers were cut and divisions reported more closely to headquarters. The design and marketing of traditional products such as rings were also re-examined. But losses continued into a second year; underperformance by JLC contributed to the $16.2 million deficit.

Jostens sold JLC to a group led by Boston-based investment firm Bain Capital, Inc. in June 1995 for $90 million in cash and notes. Wicat Systems, the computer-based aviation training division, was sold separately. The sales marked the end of a two-year restructuring and turned emphasis back on traditional business areas of making and marketing class rings, yearbooks, and other recognition products.

Profits for fiscal 1995 improved in all areas but JLC and net income returned to the plus column with $50.4 million in earnings on $665.1 million in sales. The restructuring and other operational changes resulted in $11 million in cost savings, according to the Jostens annual report. Flush with cash from the JLC sale and the company restructuring, Jostens repurchased seven million shares of stock for $169.3 million in September 1995 through a Modified Dutch Auction tender offer. But the company failed to meet earnings expectations in the latter half of 1996, and Wall Street reacted negatively.

A Second Century of Business; A New Millennium: 1997–99

Buhrmaster continued to fine-tune Jostens in 1997. The company's 100th year in business was celebrated in part with a new logo and identity system. For the first time Jostens consciously worked to extend brand awareness and preference. The effort was part of the larger mission to transform the company from a "ring and yearbook" business to "one that people call upon to help celebrate their most important moments."

The company cut additional costs with the transfer of some ring production to Mexico. In addition, the purchase of the Gold Lance class ring brand from Town & Country Corporation in July 1997 gave Jostens a strong presence in the retail class ring business, which was dominated by companies such as J.C. Penney and Wal-Mart.

Key Dates:

1897:

Otto Josten establishes small jewelry and watch repair business in Owatonna, Minnesota.

1900:

Company begins manufacturing emblems and awards for nearby schools.

1906:

Jostens Manufacturing is incorporated; high school and college class rings are added.

1922:

Hiring of Daniel C. Gainey swells sales.

1930:

Watchmaking and repair business is sold and capital is used for first ring manufacturing plant.

1933:

Gainey is elected chairman and CEO.

1946:

Graduation announcements join product line.

1950:

American Yearbook Company is launched.

1958:

School diploma maker Educational Supply Company is first acquisition.

1959:

Company goes public as Jostens, Inc.

1960:

Company begins producing specially commissioned rings for professional sports teams.

1965:

Company is listed on the New York Stock Exchange.

1968:

Jostens purchases California greeting card maker and Canadian school photo business.

1969:

Gainey retires; Jostens relocates to Minneapolis.

1970:

H. William (Bill) Lurton is named executive vice-president as company turmoil heats up.

1972:

Lurton becomes CEO.

1985:

With sales topping $400 million, Jostens gains Fortune 500 status for the first time.

1989:

Jostens Learning Corp. (JLC) is formed from combining computer-based instructional technology businesses.

1993:

Miscalculations lead to first losses since going public.

2000:

Loss of $18.7 million is posted; Jostens is taken private.

2001:

Tighter focus yields return to profitability.

2003:

A unit of Credit Suisse First Boston acquires Jostens.

2004:

Another investor, Kolberg Kravis Roberts & Co., enters picture.

2005:

Jostens' parent company changes name to Visant.

Although the retail market accounted for about 33 percent of all U.S. annual class ring sales, Jostens' name-brand appeal helped the company maintain a dominant market share. Scott Carlson wrote in a May 1998 St. Paul Pioneer Press article, "Industry observers and Jostens' competitors attribute the company's market strength to making quality products, providing reliable service to students and parents, and hiring enterprising independent sales representatives who build long-term relationships with schools and gain access for in-school marketing." But Jostens' trade practices had drawn fire as well as praise.

Dallas-based Taylor Publishing, one of only two national yearbook companies competing against Jostens (the other was Herff Jones), claimed that the Minnesota company had tried to monopolize the Texas yearbook market. In May 1998 Taylor won a multimillion-settlement, which Jostens planned to appeal. Jostens had been under the scrutiny of the attorney general's office of Minnesota in the mid-1990s in regard to "exclusive supply contracts" with schools. Although the company denied that its sales practices were monopolistic, Jostens agreed to avoid using any techniques that would imply that the schools were locked in long-term exclusive deals. Jostens had been revamping its sales operations as a part of the general company restructuring.

Buhrmaster, who added the company's chairmanship to his roles as president and CEO in the beginning of 1998, had returned the company to profitability. Yet growth continued to be a concern: total sales for 1997 were up only 4.8 percent. Jostens' mature school market had limited growth opportunities, but the company planned to make the most of those through products such as the "Millennium" ring collection, which capitalized on the interest in the new century. The smaller recognition segment of the business, which primarily served U.S. and Canadian corporations and businesses, directed its focus on the fans of professional sports teams for added sales. Additional plant consolidation and infrastructure improvements that continued into 1998 delayed the implementation of any major expansion plans. The success of Buhrmaster's tenure as the head of the century-old business would be measured by his ability to build markets for Jostens brand-name products while embarking on new business ventures.

During 1999, Jostens took a hit from Y2K computer problems. The computer glitches caused lost and missed deliveries and the possible loss of future business, according to Knight Ridder/Tribune Business News. These losses were not the company's only concern. Core ring and yearbook sales were falling below expectations.

Taken Private: 2000–05

Investcorp led a leveraged buyout of Jostens, Inc. in 2000. The deal was valued at approximately $950 million, according to Buyout. Charles Philippin, a member of Investcorp's management committee, said the investment group's interest in a company such as Jostens was linked to the growth potential for the commemorative school products sector. The number of people in the high school and college age-bracket was on the upswing.

"Investcorp will assist Jostens in a number of Internet initiatives, Philippin said, using technology to further the company's growth. For example, in the future, students will be able to order Jostens' products online, while customizing them to match their individual interests. Philippin said providing these services should increase the company's buy rate by making the products more readily available to its customers," Leslie Green wrote.

During late 2001, Jostens sold off its loss ridden recognition division and tightened its focus on school-based operations. The company also closed a distribution center in Tennessee and a manufacturing plant in Canada. The moves helped Jostens post earnings of $4.1 million versus an $18.7 million loss in 2000.

Investcorp and other equity owners, including MidOcean Partners LP (DB Capital Partners), First Union Leveraged Capital, and Northwestern Mutual Life Insurance Co., sold Jostens in the summer of 2003. DLJ Merchant Banking Partners, a unit of Credit Suisse First Boston (CSFB) acquired the country's largest school yearbook and ring company in a deal valued at about $1.1 billion, according to the Daily Deal. During 2002, Jostens' sales were $756 million: 42 percent from yearbooks; 27 percent from jewelry, primarily rings; and 24 percent from diplomas, announcements, caps and gowns.

But the Jostens roller coaster ride was not over. The company lost $25.8 million during the 2003 fiscal year on sales of $788 million. In the summer of 2004 another ownership change was launched. Kolberg Kravis Roberts & Co. (KKR) would come on as a new equity investor, and Jostens was to be combined with educational textbook publisher Von Hoffmann Corp. and sample product maker Arcade Marketing under a new holding company.

The deal prompted the early change in leadership. Jostens President Michael L. Bailey would succeed Buhrmaster as CEO, and Jostens would continue to operate independently under the new structure. Marc Reisch, senior KKR advisor and chair of Canada's Yellow Pages Group, would lead the holding company, 90 percent jointly owned by KKR and DLJ. The remaining 10 percent of the company would be held by Jostens' management and existing investors.

As the complex deal, valued at $2.2 billion, worked toward completion, Jostens began marketing rings to fantasy football leagues via Internet sites. U.S. fantasy sports games participants numbered about 15 million in 2003, according to a Providence Journal article. Jostens had produced rings for 25 out of 38 Super Bowl victors and was running with that connection. Each Jostens-made diamond studded ring cost the New England Patriots in excess of $15,000. Fantasy league rings fell in the $99 to $400 range. By comparison, high school students were paying from $270 to $1,155 for their keepsakes.

By September 2004, credit for Jostens Intermediate Holding Corp. (Jostens IH Corp.) and the recapitalization of Jostens, Von Hoffmann, and Arcade by KKR and DLJ was set in place. CSFB was an underwriter along with Bank of America and Deutsche Bank. In early October, the transactions required to create the new specialty printing, marketing, and school-related affinity products and services organization were completed. Jostens IH Corp. produced 2004 fiscal year sales of about $1.5 billion. Jostens sales contributed $807.2 million to the total, a year over year increase of 2.4 percent.

In February 2005, the combined company and holding company took on new names, Visant Corporation and Visant Holding Corp., respectively. In April, Jostens hit the sports news again, when it delivered World Series rings to the Boston Red Sox. At 500, it was Jostens' largest championship ring order ever. Given that the Sox' last victory came in 1918, just 21 years into Jostens' 108 year history, it was no wonder.

Principal Competitors

American Achievement Corporation; Herff Jones Company of Indiana, Inc.; Walsworth Publishing Company, Inc.

Further Reading

Benson, Tracy E., "America's Unsung Heroes," Industry Week, December 3, 1990, p.12.

Bjorhus, Jennifer, "Jostens Gets New Owner," Knight Ridder/Tribune Business News, July 22, 2004.

Byrne, Harlan S., "Jostens Inc.: Demographics Offer an Earnings Kick," Barron's, October 14, 1991, p. 38.

"Business Briefs: Jostens Inc.," Wall Street Journal, January 28, 1994, p. B4.

Carlson, Scott, "Running Rings Around Competition," St. Paul Pioneer Press, May 17, 1998, pp. 1D, 3D.

Cohen, Amy, "CSFB Shops Mammoth Jostens Recap," Loan Market Week, September 13, 2004, pp. 1+.

Colberg, Sonya, "Del City, Okla.-Based Trophy Maker Buys Division of Yearbook Company Jostens," Knight Ridder/Tribune Business News, December 6, 2001.

"Cost of High School Rings Up to $1,100," UPI NewsTrack, November 15, 2004.

"Daily Briefing," Atlanta Journal-Constitution, July 22, 2004, p. F2.

De Llosa, Patty, "What Business Am I In?" Fortune, November 14, 1994, p. 54.

"Digest of Earnings Reports," Wall Street Journal, July 30, 1993, p. C14.

"Digest of Earnings Reports," Wall Street Journal, August 4, 1995, p. B6.

Ehrlich, David, "DLJ Completes Jostens Buyout," Daily Deal, July 30, 2003.

Feyder, Susan, "Jostens Names Buhrmaster President and COO, Filling Positions Left Vacant by Two Retirements." Star Tribune, June 24, 1993.

——, "Jostens' New CEO Rings Out Some Old Concepts," Star Tribune (Minneapolis), May 23, 1994, p. 1D.

——, "Jostens Taking Charge for Closing Photo Plant," Star Tribune (Minneapolis), May 1, 1998, p. 3D.

——, "Jostens to Buy Back 7 Million Shares for $168 Million in "Dutch Auction," Star Tribune (Minneapolis), September 2, 1995, p. 1D.

——, "Longtime Jostens CEO Lurton Says He's Retiring," Star Tribune (Minneapolis), October 29, 1993, p. 1D.

——, "Rival Wins Suit Against Jostens over the Selling of Yearbooks," Star Tribune (Minneapolis), May 15, 1998, p. 3D.

——, "Still Going for the Brass Ring," Star Tribune (Minneapolis), April 20, 1998, p. 1D.

Fiedler, Terry, "H. William Lurton: Modesty That Rings True," Corporate Report Minnesota, January 1990, pp. 45–51, 92.

Fierman, Jaclyn, and Rayport, Jeffrey, "How to Make Money in Mature Markets," Fortune, November 25, 1985, pp. 46–50.

Foster, Jim, "Jostens Plans Consolidation Moves," Star Tribune (Minneapolis), January 29, 1992, p. 3D.

Fredrickson, Tom, "Jostens Tries Staff Buyouts to Ring in Costs," Minneapolis/St. Paul CityBusiness, April 22–28, 1994, pp. 1, 30.

Freund, Bob, "Class-Ring Giant Jostens Names Rochester, Minn., Native CEO," Knight Ridder/Tribune Business News, August 30, 2004.

——, "Rochester, Minn., Native to Preside Over Newly Recapitalized Jostens Inc.," Knight Ridder/Tribune Business News, August 30, 2004.

Gold, Jackey, "How to Make a Cash Cow Dance," Financial World, June 12, 1990, p. 38.

Green, Leslie, "Live Deals: Investcorp Takes Jostens Private," Buyouts, January 10, 2000.

Greenbaum, Jessica, "Lord of the Rings," Forbes, May 21, 1984, pp. 108–10.

Grimaldi, Paul, "Jostens Hopes to Score with Fantasy Football Rings," Providence Journal (Providence, R.I.), September 9, 2004.

Gross, Steve, "Jostens Learning Expanding PC Line," Star Tribune (Minneapolis), April 15, 1992, p. 3D.

"How to Make Money in Mature Markets." Fortune, November 25, 1985, pp. 46–50.

Isa, Margaret. "For Jostens, Class Rings Fit the Best," Wall Street Journal, August 21, 1995, p. C1.

"Jostens Has Lower Earnings, Sales," Star Tribune (Minneapolis), January 19, 1993.

"Jostens Inc.," Wall Street Journal, July 7, 1995, p. A2.

"Jostens Moves to Head of the Class," St. Paul Pioneer Press & Dispatch, October 14, 1985.

"Jostens Reports Sales and EBITDA Increase for 2001," Business Wire, February 14, 2002.

Jostens' Today (special 90th anniversary issue: "90 Years of People, Progress and Pride"), Minneapolis: Jostens, August 1987.

Kosman, Josh, and David Carey, "DLJ Pays $1.1B for Jostens," Daily Deal, June 18, 2003.

Marcotty, Josephine, "Boston Investment Group Is Buying Jostens Learning," Star Tribune (Minneapolis), May 24, 1995, p. 1D.

McCartney, Jim, "Bloomington, Minn.-Based Jostens Loses Earnings to Year 2000 Bug," Knight Ridder/Tribune Business News, July 2, 1999.

Moylan, Martin J., "Jostens Learning Gives Stock an Edge," St. Paul Pioneer Press & Dispatch, August 12, 1991.

Peterson, Susan E., "Lower-Than-Expected Earnings Forecast Drops Jostens Stock," Star Tribune (Minneapolis), June 15, 1996, p. 1D.

Raley, Marcia A., "Dain Bosworth Research Capsule: Jostens," January 25, 1988.

Reinan, John, "500 in Red Sox Family Get Jostens-Made Series Rings," Star Tribune, (Minneapolis), April 12, 2005, p. 1D.

——, "Wall Street Investment Firms Are New Owners of Jostens," Star Tribune, (Minneapolis), July 22, 2004, p. 1D.

Saporito, Bill, "Companies That Compete Best," Fortune, May 22, 1989, p. 36.

Spiegel, Peter, "Ringing True," Forbes, November 6, 1995, p. 12.

"Visant Corporation Announces 2004 Fourth Quarter and Full Year Results," Business Wire, March 10, 2005, p. 1.

"Yearbook Specialist OKs Acquisition by Investors," Graphic Arts Monthly, July 2003, p. 18.

Youngblood, Dick, "Former CEO of Jostens Explains What Went Wrong After 19 Years of Growth," Star Tribune (Minneapolis), April 20, 1994, p. 2D.

——, "In a Shrinking Market, He Gently Led Jostens to New World of Growth," Star Tribune (Minneapolis), March 18, 1991.

—Jay P. Pederson

—update: Kathleen Peippo

Jostens, Inc.

founded: 1897

Contact Information:

headquarters: 5501 norman center dr.
minneapolis, mn 55437 phone: (952)830-3300 fax: (952)830-3293 url: http://www.jostens.com

OVERVIEW

Minneapolis, Minnesota-based Jostens, Inc. makes class rings for high school and college students. The firm also produces rings for sports championship teams such as the World Series, Super Bowl, and NHL Stanley Cup winners. Additional activities include yearbook production, school photography, and the manufacture of graduations caps and gowns.

COMPANY FINANCES

After four consecutive years of growth, revenues for Jostens reached $805 million in 2000. However, they had yet to return to their 1993 high of $914.8 million. Profits of $57.2 million in 1997 fell to $41.8 million in 1998. Although profits improved marginally to $43.2 million in 1999, the firm posted an $18.7 million loss in 2000. That year, an investment company called Investcorp took Jostens private. Jostens returned to profitability in 2001, posting earnings of $4.1 million.

ANALYSTS' OPINIONS

Many analysts believed Jostens was on the right track in the early 2000s. Shortly after the firm had decided to refocus on its core school-based operations, it had been taken private by Investcorp. As a private company, Jostens no longer needed to invest resources into efforts to boost its stock price, which had remained flat for years regardless of the firm's performance. According to Merrill Lynch Global Securities analyst George Chalhoub, as quoted in a May 2001 issue of Minneapolis-St. Paul City Business, "There's been a few bumps thus far as the jewelry hasn't met predictions during the last two quarters, but the company is now reorganizing and has the freedom to make the necessary changes. It's worked for them, and I would expect to see them grow." Other analysts, however, believe the school market for things like rings and yearbooks is nearing saturation.

HISTORY

Otto Josten founded a small jewelry and watch repair business in Owatonna, Minnesota, in 1897. Three years later, Josten began making emblems and awards for local schools. The young company started making class rings, which came in only one size and did not include gem-stones, in 1906.

After several years of modest growth, Josten hired his first full-time salesperson, Daniel C. Gainey, in 1922. A former football coach and teacher, Gainey found he was also skilled in sales. During his first year, he sold $18,000 worth of rings. In 1923 Josten hired four additional part-time salespersons and focused his business, by then called Jostens Manufacturing Co., on ring making. Josten sold his watch making and repair assets in 1930, using the proceeds to build a ring manufacturing plant. By the mid-1930s, sales had exceeded $500,000. In addition, Gainey had taken over as chairman and CEO.

In an effort to lessen its reliance on ring sales, Jostens diversified into graduation announcements in 1946. Four years later, the firm launched the American Yearbook Co. Jostens bought Educational Supply Company, a school diploma maker, in 1958. The following year, Jostens completed its initial public offering. Growth via acquisitions helped boost sales to $26 million in 1962. The company listed its shares on the New York Stock Exchange in 1965. Acquisitions in the late 1960s included National School Studios, based in Winnipeg, Manitoba. By then the firm had positioned itself as the largest class ring and yearbook maker in the United States with sales of nearly $100 million.

The 1970s proved much more tumultuous for the firm. A power struggle that started in the late 1960s after Gainey retired left the firm without stable leadership for nearly four years. In 1972 H. William Lurton took over as CEO and began working to restore order to Jostens. Diversification beyond educational products, once thought to be essential to future growth, was soon halted. Lurton sold off a greeting cards manufacturer and a men's accessories business that had been acquired by previous management. Efforts to offer travel services via Jostens Travel, a unit created in 1972, were halted as well.

Declining high school enrollment began to concern Lurton in the early 1980s. Believing that investors would see this erosion of Jostens' core market as an indication that the firm's outlook was in question, Lurton decided to organize a management buyout. The board of directors approved this plan in 1982. However, managers willing to invest money in such a buyout failed to materialize. Lurton then decided to ward off potential downturns in sales by targeting private schools for the first time. In fact, the firm actually began to purchase private schools. During 1983 and 1984, Jostens bought San Gabriel Colleges of California, Metridata Education Systems of Kentucky, and three vocational schools. The firm also diversified into educational software with the purchase of the Educational Systems Division of Borg-Warner Corp. Sales in 1985 grew to $400 million, and Jostens found itself listed as a Fortune 500 company for the first time. Prescription Learning Corporation (PLC), acquired in 1986, was consolidated with other educational software holdings in 1989 to form Jostens Learning Corp.

Jostens sold its proprietary schools, numbering 36 at the time, to CareerCom Corp. in 1987. By then, employees totaled 9,000, and the firm's independent sales staff had grown to 1,400. An average return on investment of 27 percent between 1983 and 1989 caught the attention of Wall Street analysts. Fortune magazine named Jostens one of the "Companies That Compete Best" in 1989. The following year, Corporate Report Minnesota named Lurton "Executive of the Year" and Industry Week named Lurton one of "America's Unsung Heroes."

Jostens diversified into award and recognition products in 1990 by acquiring both Gordon B. Miller & Co. and Lenox Awards. By 1992 Jostens Learning Corp. accounted for 20 percent of earnings. Because the educational technology market was relatively untapped, many analysts believed that the firm was poised for continued success. In August of that year, Jostens acquired rival Wicat Systems and convinced Dell Computer Corp. to begin marketing a Jostens line of 386 and 486 personal computer systems. Instead of realizing the expected growth, however, Jostens posted a loss of $12.1 million in 1993. The downturn was due at least in part to educational budget cuts.

Robert C. Buhrmaster succeeded Lurton in 1993. He began to restore the firm's focus on its core class ring, yearbook, and recognition operations by reducing educational technology efforts. He eliminated layers of management and placed the firm's various divisions under more direct control of top executives. Losses persisted in 1994, prompting the firm to sell Jostens Learning Corp. to an investor group headed by Bain Capital, Inc. for $90 million the following year.

Restructuring continued into 1997, when the firm devised a new logo and increased marketing efforts. To reduce costs, Jostens moved a portion of its ring manufacturing operations to Mexico. That year, Jostens also bought Gold Lance, a retail class ring line, from Town & Country Corp. Investcorp paid $950 million for Jostens in 2000, taking the firm private. The following year, the firm began to divest its general awards and employee recognition operations. In addition, Jostens closed a distribution center in Memphis, Tennessee, and a manufacturing plant in Sherbrooke, Quebec.

STRATEGY

One of Jostens' key strategies throughout its growth and development in the twentieth century was direct sales. Although the firm first used its own salespersons to peddle class rings at nearby schools, rapid growth eventually prompted Jostens to develop a nationwide network of independent sales representatives. According to a May 1998 issue of St. Paul Pioneer Press, "Industry observers and Jostens' competitors attribute the company's market strength to making quality products, providing reliable service to students and parents, and hiring enterprising independent sales representatives who build long-term relationships with schools and gain access for in-school marketing."

FAST FACTS: About Jostens, Inc.

Ownership: Since May 2000, Jostens, Inc. has operated as a private company owned by Investcorp.

Officers: Robert C. Buhrmaster, Chmn., Pres., and CEO, 54, 2001 base salary $561,808; John Feenan, SVP and CFO; Michael L. Bailey, Chmn., SVP, and Gen. Mgr. School Solutions, 45, 2001 base salary $260,385; Carl H. Blowers, SVP Manufacturing and Recognition, 61, 2001 base salary $308,617

Employees: 6,500

Chief Competitors: Competitors to Jostens include Commemorative Brands, Lifetouch, and Norwood Promotional Products.

CHRONOLOGY: Key Dates for Jostens, Inc.

1897:

Otto Josten founds a small jewelry and watch repair business in Owatonna, Minnesota

1906:

Josten begins making class rings

1922:

Josten hires Daniel C. Gainey as his first full-time salesperson

1946:

The firm diversifies into graduation announcements

1959:

Jostens completes its initial public offering

1972:

H. William Lurton takes over as CEO

1985:

The Fortune 500 adds Jostens to its ranks

1993:

Robert C. Buhrmaster takes over as CEO

2000:

Investcorp pays $950 million for Jostens

Jostens tended to waver between strategies of growth via diversification and a return to core operations. In the late 1990s, as the firm once again narrowed its focus to school-based operations, it also began working on developing brand awareness. For example, Jostens developed a new corporate logo. In addition, the purchase of the Gold Lance class ring brand in 1997 was designed to push the Jostens brand into the retail class ring market, a segment traditionally dominated by retailing giants like J.C. Penney and Wal-Mart. Despite intense competition, Jostens' efforts to develop its brand awareness helped the company maintain a dominant share of the class ring market.

PRODUCTS

Along with class rings and athletic rings, Jostens sells graduation announcements, diplomas, caps and gowns, senior and prom portraits, student IDs, group and individual school pictures, and yearbooks.

POWER STRUGGLE AT JOSTENS

Although Jostens CEO Daniel Gainey retired in the late 1960s, his position as a major shareholder allowed him to maintain a degree of control over Jostens. A power struggle ensued, and in a period of four years, the firm hired and fired three chairpersons as well as a president. In 1970 Gainey started secret negotiations to sell Jostens to Bristol-Myers. When the pending Bristol-Myers deal became public, several Jostens executives simply resigned, prompting Bristol-Myers to end negotiations with Jostens. A top Jostens salesperson, H. William Lurton, who was acting as Jostens' chief operating officer, remained. Lurton faced off against the CEO at the time, Richard Schall, who had been with Jostens for roughly 18 months. Lurton believed the outside management team Schall had put in place was having a negative impact on the corporate culture of Jostens and making strategic changes too quickly. He and several long-time Jostens executives demanded Schall's resignation, and eventually the board of directors agreed. Lurton was appointed CEO in February of 1972, a position he held for 21 years.

CORPORATE CITIZENSHIP

The Jostens Foundation gives $500,000 annually to nonprofit community-based youth and education endeavors. The firm also matches a portion of the charitable donations made by employees, grants a number of post-secondary scholarships to family members of Jostens employees, and sponsors United Way fundraisers.

SOURCES OF INFORMATION

Bibliography

carlson, scott. "running rings around competition." st. paul pioneer press, may 1998.

"jostens, inc." international directory of company histories. detroit: gale group, 1999.

jostens, inc. home page, 2002. available at http://www.jostens.com.

"jostens to close memphis and canadian operations." memphis business journal, 23 march 2001.

martyka, jim. "leveraged buyouts bring flexibility." minneapolis-st. paul city business, 4 may 2001.

For additional industry research:

investigate companies by their standard industrial classification codes, also known as sics. jostens, inc.'s primary sics are:

3172 personal leather goods, not elsewhere classified

3911 jewelry, precious metal

also investigate companies by their north american industry classification system codes, also known as naics codes. jostens, inc.'s primary naics codes are:

316993 personal leather goods (except women's handbag andpurse) manufacturing

339911 jewelry (except costume) manufacturing